UAE-based Etisalat’s proposal to raise foreign equity in its Indian venture has again run into rough weather, with the home ministry raising concerns over the company’s back-end tie-up with Chinese firm Huawei.
While deferring, for the third time, the proposal of Etisalat for raising stake to 54.27 per cent from the existing 49 per cent in its Indian venture, the Foreign Investment Promotion Board (FIPB) said the ministry of home affairs had no objection to the proposal but subject to addressal of some security concerns. The concerns include the company’s back-end technical tie-up with Huawei.
The government had earlier, too, raised security-related issues on the presence of Chinese telecom equipment firms Huawei and ZTE in India. Further, Etisalat’s presence in Pakistan and Afghanistan and the attempt to mount telecom surveillance application software on Blackberry within the UAE in 2009 should also be addressed, FIPB said in a note.
It has also asked for comments of the department of telecommunications (DoT) over this issue. The company would be given a chance to clarify its position.
The home ministry had earlier also raised concerns about Etisalat’s proposal, stating the company had operations in Pakistan. Etisalat holds 45 per cent in Etisalat DB, earlier known as Swan Telecom. Etisalat’s proposal has already been deferred thrice at FIPB since January. It has licences to offer mobile services in 13 circles in India.